Cagle: Brands must engage to keep dealers amid recession

Many industries took a hit to revenue and productivity in the wake of the COVID-19 pandemic, but top tire companies actually increased sales in both 2020 and 2021.

The U.S. Tire Manufacturers Association (USTMA) projects U.S. tire shipments in 2022 will hit 342.1 million units, 2% higher than 2021 (335.2 million units). The future looks bright for the tire industry for now, but how long will that be the case?

With inflation creeping up in the U.S., and various economic forecasters projecting up to an 80% chance of a recession, a continuing increase in tire sales is far from guaranteed.

Recession, inflation and continuing global unrest could lead to disappearing dealers as companies rely on mergers and acquisitions to stay profitable. Tire demand could decrease in tight economic times as more customers adopt the "drive it till the wheels fall off" approach, putting off routine maintenance and upgrades except when absolutely necessary. There is also the danger of increased raw material costs.

Many tire manufacturers and dealers will respond to these challenges by increasing prices, which can cause customers to switch brands. There are other steps tire brands can take, however, that help prepare for tough economic times while retaining customers:

Engaging channel partners means giving them memorable experiences with your brand and offerings that are useful and relevant to them. A Salesforce B2B buyer study found that 68% of B2B buyers' brand loyalty is influenced by whether a company offers rewards or incentives.

Common channel incentives include points programs (in which partners redeem points for merchandise in an online rewards catalog), debit/gift cards or group incentive travel. Even small rewards can increase partner engagement and make an impact on their behavior. Whether it's sales performance, data submission or training, any behavior can be motivated with the right reward.

Dealers are better equipped to sell your products when you offer them the product information, marketing assets, industry content and training materials they need. Go the extra step and give them easy access to such materials through a partner portal or e-commerce platform. Anything you can do to provide dealers with a more convenient user experience will engage them and elevate your brand's value.

Adding games to your dealer experience is a great way to improve engagement. For example, you can increase incentive-program participation by offering games of chance during enrollment where dealers spin a virtual wheel to earn points. Then there's the interactive sales leaderboard that sparks friendly competition during sales promotions and competitions.

Training can be "gamified," as well, be it contests or daily trivia questions. When you pair learning with gamification, it has been proved to improve learning retention because of the positive emotional connections and associations made, promoting the release of endorphins, reducing stress and improving brain function.

Channel management software — whether it's a customer relationship management (CRM) system, an incentive program or a channel marketing platform — can help nurture partner relationships. As personalized buying experiences become more important, it will be crucial to use software and processes that help you tailor channel partners' interactions with your brand.

Look for these three aspects of channel software to help with personalization:

• Data integration: Channel software should have data integration capabilities so that you don't lose data across a disparate channel tech stack. You should be able to pull data from your CRM, incentive program and channel marketing program, for instance, to build detailed customer profiles that inform your sales and marketing strategies.

• Automation: With additional sales and customer data comes the need to manage and use that data effectively. Too much reliance on automation can diminish the all-important human touch in sales and marketing, but strategic automation can save valuable time while better serving partners.

Auto-delivered product information and promotion reminders, for example, can be helpful to your partners while incrementally increasing engagement and revenue.

• Segmentation: Software that can segment your partners into different groups is key to personalizing channel partner experiences. You can separate them by region, company size, dealer type, purchase history or promotion participation — anything that helps pinpoint what information and interactions may interest them.

When you have detailed, accurate partner segments, you can send your partners personalized reward-earning opportunities, promotions, discounts and marketing.

Better data, strategically used software and partner engagement techniques allow you to develop more productive, collaborative interactions with partners. They're more willing to share customer data with you in exchange for the value and convenient experience your brand provides.

Rather than raising your prices or spamming them with marketing, you can rely on better partner relationships to drive incremental revenue. A few examples:

• Warranty registrations: Partners are much more likely to submit product warranty registrations if they have an incentive to do so in the form of rewards, as well as an online tool that makes it easy for them. By fostering increased warranty registrations, you can fill in a lot of missing data about your customers.

• More survey, feedback: Rewards can help you motivate channel partners to submit feedback and customer surveys, while integrated data can help you target partners who are most amenable to submitting information and when.

• Increased product knowledge: Rewards and resource access are a powerful combination. With these two motivators influencing channel partners, they're more likely to stay up to date on your products and services, even complete training courses and earn certificates, boosting their confidence and sales performance.

Winners and losers emerge in every market disruption. With the right tools to engage channel partners, establish differentiation and preserve your price integrity, tire manufacturers can survive and even thrive in a recession.

Now, when sales are good, is the best time to launch the tools and strategies that increase your value in your channel partners' eyes and future-proof your brand.

Jeff Cagle is director of global accounts at Incentive Solutions (www.incentivesolutions.com) and OneAffiniti (www.oneaffiniti.com), where for 27 years he has helped provide B2B brands, including those in the tire and automotive service markets, with insights on how to leverage channel incentive plans and technology.